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Planning Board to discuss Alameda Point jobs plan

Planning Board to discuss Alameda Point jobs plan

Michele Ellson

Monday, November 26, 2012 - 00:05

City leaders will be kicking the tires on what staffers are calling “a sensible and targeted approach” for bringing jobs to Alameda Point that focuses on expanding the business sectors that already call the Point home.

Members of the Planning Board will have their say on the proposed economic development strategy for the Point at the board’s regular meeting tonight, and the City Council is expected to take it up on December 5.

City leaders have abandoned an earlier strategy that could have put thousands of homes at Alameda Point in favor of one more focused on jobs, which they believe will provide greater economic benefits for the Island. The consultants who drafted the federally funded draft strategy said the city should seek to expand the marine and food and beverage industries and artisan manufacturing outfits that have already chosen to call Alameda and the Point home.

They said the city needs to clean up the Point’s leasable spaces and more aggressively market them to potential tenants, focusing on the buildings’ views and other unique attributes along with Alameda’s central Bay Area location and the relative safety the Island offers.

Even with those benefits, though, the city will need to clear some high hurdles in order to attract employers, the consultants wrote – some of which may not be surmountable until the market for commercial space revives.

Alameda’s isolation and lack of direct freeway access comprise one of those hurdles, and the lack of public transit, restaurants and other amenities on the Point or nearby is another, consultants with Keyser Marston Associates wrote in a series of reports that make up the proposed strategy.

Other issues facing would-be developers or businesses eyeing the Point include toxic contamination, sea level rise, and development restrictions imposed along the Point’s entire shoreline and the presence of the California least tern, which has chosen the base’s former runway as a nesting area.

But the biggest hurdles are a deep recession that eliminated one out of every 10 jobs in the East Bay – and with them, the demand for commercial space here – along with the high cost of refashioning the Point’s septuagenarian building stock into 21st century office, research and development and industrial space that’s more attractive than the turnkey and build to suit opportunities available in other cities.

“Simply stated, unless the space at Alameda Point is unique and at an affordable rent, tenants have many choices in the market,” the consultants wrote.

The sheer size of the former Naval Air Station – 918 acres – could be seen as both an opportunity for a developer seeking a large canvas on which to extend a grand vision and a daunting challenge for the smaller and mid-size businesses comprise most of the East Bay’s employment base.

Cost is another major issue. Modernizing the existing buildings’ utilities and making them handicap accessible could cost as much as $224 a square foot, an analysis of five buildings picked as prime candidates for reuse found – more than the $170 per square foot current market asking rents could support and the $130 per square foot average asking price of office space in Alameda, Oakland and Emeryville.

“Based on this analysis, KMA concludes that market rents would have to increase significantly before an extensive rehabilitation of the buildings is financially feasible,” the consultants wrote in their analysis.

The costs could force the city to maintain its incremental approach toward making fixes until the economy turns around more completely, though the city could also offer longer-term leases, defer fee payments and seek out tax credits to defray them, the consultants wrote.

Alameda is expected to gain 16,000 jobs by 2035, the Association of Bay Area Governments reported, more than the 14,000 the Naval Air Station held before it closed in 1997. Some 80 percent of the jobs created here between 1995 and 2008 came from new companies started in Alameda or locally based companies that expanded, the consultants wrote.

But the city will face fierce competition for attracting employers.

The East Bay corridor that stretches from Richmond to Fremont holds 23 million square feet of vacant industrial space and another 6.6 million square feet of available office space. And while some East Bay cities have seen demand for available space increase, demand for office and research and development space here has declined.

San Francisco has seen demand for office space surge, driving lease rates to levels not seen since the dot-com boom, the consultants wrote. But the effects of that surge have not rippled to the shores of Alameda, which has some of the East Bay’s highest vacancy rates despite the Island’s below-average lease costs but which possesses not a single square foot of the highly prized, amenity-rich Class A office space available in San Francisco and along the I-680 corridor. Marina Village alone posted a 30 percent vacancy rate in February, the consultants wrote, with a half million square feet of office space sitting empty.

Alameda Point will also be competing with a number of other big sites and commercial properties that will soon be available in other prime Bay Area locations. San Francisco is working to bring Mission Bay and former military bases at Treasure Island and Hunters Point online for development, while the city of Fremont has 400 acres available at three sites tagged for commercial development. Closer to home, Oakland’s Oak to 9th area, which has been cleared for the development of 3,100 homes, had been an early contender for Lawrence Berkeley National Laboratory’s new campus, while the city of Albany has developable space near the freeway at Golden Gate Fields.

Alameda Point boasts more than 5 million square feet of space across 91 existing buildings, 1.8 million square feet of it filled by more than 100 businesses and nonprofit and governmental entities that may employ as many as 1,400 people. The consultants estimated that another 2.17 million square feet could be occupied based on Alameda’s anticipated job growth, with half of that space filled by warehouse and manufacturing uses.

They recommend the city pursue additional food and beverage producers; small, artisan manufacturers; and an expansion of the city’s booming marine industry, for which some of the consultants’ interviewees called Alameda Point “a match made in heaven” due to the lack of suitable space elsewhere. The arts, entertainment and recreation sector is another the city could explore, they said, as is film and event production.

Alameda could also market the Point’s wide-open spaces to companies in nearby Berkeley and Emeryville that are seeking to expand but can’t find space in those cities, the consultants wrote. And the Point, which was one of the final candidates for a second campus envisioned for the Lawrence Berkeley National Laboratory, still may be a contender for a large campus user whose imagination is captured by the Point’s views, ample space and Streamline Moderne architecture.

Alameda is too far away from Silicon Valley to capitalize on an anticipated expansion of high tech manufacturing, the consultants determined, and the Point lacks the amenities needed to draw gaming and social media companies who seek them out in order to draw top talent. Other industries that have set up shop at the Point, including alternative energy, may see growth, but not enough to absorb much of the space it has for let.

The city needs to create a fresh – and marketable – identity for the Point, the consultants said, offering a sense of place by breaking it down into a quartet of smaller “districts,” offering signage to advertise what’s already there and bringing in amenities that make the Point a more hospitable place to work.

The city could make the Point more attractive to businesses by preparing 15- to 25-acre chunks of the Point for development, they said – a strategy that proved successful for the developer managing the Harbor Bay Business Park – and subdividing big buildings into spaces small and midsize businesses need. City leaders will also need to consider spending lease revenues on debris removal and fresh paint and carpeting for some of the Point’s building stock, the consultants said – and may even consider redeveloping a group of buildings in order to demonstrate the Point’s potential.

Real estate brokers have ceased tracking availability at the Point, the consultants wrote, having determined that available buildings here are obsolete. But the Point has attracted interest from some business sectors that have already established a foothold here on the Island.

The city recently inked a deal with Faction Brewing Company to occupy half of a former airplane hangar next door to St. George Spirits and has been in negotiations with another booze producer; it’s also negotiating a potential deal to bring a 25,000 square foot indoor skate park, the consultants wrote.

The city has been plotting the transformation of the former Naval base since the federal government announced its plans to close it in the early 1990s. But none of those plans, which have included two earlier redevelopment attempts, has come to fruition.

City leaders embarked on a fresh planning process in 2010, after a development plan drafted by the Point’s most recent master developer, SunCal, was rejected by voters and the City Council booted the company off the Island. The city has recently reached a deal to obtain the land from the Navy at no cost, with the transfer anticipated to take place in early 2013.

In addition to the economic development strategy, city staffers and consultants are working to change zoning permissions at the Point so that the development city leaders want to see there can proceed more expeditiously. A plan to better define the costs of replacing the Point’s worn, outdated roads and utilities and installing a modern telecommunications system is also in the works.

The report, along with another that will assess the environmental and other impacts of development proposed for the Point, are due in early 2014.

The Planning Board meeting begins at 7 p.m. today at City Hall, 2263 Santa Clara Avenue, and will be broadcast on Comcast cable channel 15. The reports are available here.

Comments

Submitted by Mpomeroy on Mon, Nov 26, 2012

16000 jobs by 2035...... Does that sound likely? Given our current number of households and our growth constraints? As usual with these forecasts it is the one size fits all mentality. As we know, one size never fits all. So why not start developing strategy for the Island community that we all love and want to preserve. Let's even assume that we will have those 16000 new jobs by 2035. Who will get those jobs? Unless there is a policy in place to encourage local hiring, then most of those those people will be trying to fit through our little tunnel every morning , causing more traffic problems . As of now, only 25% of Alamedans work on the island.
The City should continue to give incentives to companies who want to locate here to fix up the buildings at the point, and leases long enough to make such improvements feasible. But they must also incentivize the hiring of local people in order to make our growth sustainable.
If ABAG can dictate the number of affordable housing units for our community, under the rubric of limiting greenhouse gas in the Bay Area, this jobs policy should be a no brainer for an island city such as ours.

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